When your company decided to implement a qualified retirement plan you became subject to a detailed and complicated set of rules and regulations.  Because your company is named in the Plan Document as Plan Administrator it is your responsibility to insure that you abide by these rules and regulations.  This is where Actuaries & Associates (A&A) enters the picture.  We are a Third Party Administrative (TPA) firm responsible for helping you follow these rules and regulations.  We are independent of any Broker or Investment Company providing services to your plan.  While we do work closely with these individuals or companies, we are still a separate entity and not related in any way to them.  Our job is to help you design a Plan that will make your company more attractive to prospective employees and to retain key employees in your business.  Once the plan is designed to meet your needs, we help you administer your Plan in accordance with the Plan Document.  Failure to properly administer your plan can result in plan disqualification and/or substantial penalties imposed by the Internal Revenue Service (IRS) or the Department of Labor (DOL).

The first step in implementing a qualified retirement plan is the completion of a Plan Document.  The Plan Document contains all of the provisions you elected in the plan design stage.  Things such as who is eligible, how long an employee has to work before entering the plan, who will share in the employer contributions, how much will the employer contribute and when will the participants vest are a few of the many provisions that you have the ability to control.  You can change any of these elective provisions once the plan has been established by amending the plan document.  This amendment can be accomplished only by contacting our Amarillo office.  Also, any time your company has any changes in ownership, address or entity type or when key employees retire that may be listed in the Plan Document by name you should contact your Administrator or the Amarillo office so our records can reflect these changes.  Without this constant communication between your company and A&A,  the Plan Document becomes obsolete.  Closely related to the Plan Document is the Summary Plan Description (SPD).  The SPD, written in “plain English”, describes the benefits offered under the Plan, the rights of the participants, and other important provisions such as the Plan’s eligibility requirements, vesting schedule and when a participant can withdraw funds from the Plan.  Under DOL regulations, each participant must receive a copy of the SPD by the later of:

1. 90 days after the employee becomes a participant, or

2. 120 days after the later of the Plan’s effective date or adoption date.

In addition to the importance of the Plan Document issues discussed above, there are many day to day activities that require action to be taken on your part.  As new employees become eligible they must be enrolled in the Plan.  When a participant wants to take a loan the proper paperwork must be completed.  When a participant requests a distribution, it must be determined if they are eligible for a distribution and if so how much should be distributed.  There are forms available to initiate these activities under the Forms page.  In addition to completing A&A’s form, you may be required to complete a form for your investment company.  We have provided links to some of these companies.  If your investment company is not listed, call your Administrator.

Annually, we will contact you to gather information necessary to complete the IRS and/or DOL required reporting and testing for the year.  In order to perform these requirements we must obtain complete and accurate information about the employees of your company and information about the ownership and family relationship between any owners and employees of the company.  This information must be provided for all employees, not just those eligible or actually participating in the Plan.  A sample of this annual request can be found under the What to Expect at Year End on the administrative guide page.

There are many dates to remember and deadlines to meet for qualified retirement plans.  Each year a qualified plan must file an Annual Return (Form 5500 with attachments) with the Employee Benefits Security Administration.  1099’s must also be completed and submitted to both the participant and the IRS for distributions made from the Plan during the year.  401(k) plans have some additional dates to remember.  Contributions withheld from participants checks must be deposited into the Plan within 5 days in most cases.  For 401(k) plans that fail the ADP or ACP test for the year, distributions must be made within two and one half months after the plan year end.

This overview and this complete guide is very general and, as stated elsewhere, is intended to assist you in complying with the rules governing plan administration.  It is also intended to try and stress the importance of qualified plan administration and how failure to properly administer your plan could result in substantial penalties imposed by the IRS or the DOL.  If you are unsure about any aspect of your Plan, please contact your assigned administrator.